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TMI Blog2010 (10) TMI 857X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, then assessee is not entitled to interest for such period. Further, what is clear from sub-cl. (2) is that, if the officer feels that delay in refund for any period is attributable to the assessee, the matter should be referred to the CIT or Chief CIT or any other notified person for deciding the issue and ordering exclusion of such periods for the purpose of granting interest to the assessee u/s 244A(1). In this case, there was no decision by the CIT or Chief CIT on this issue and so much so, we do not think that the AO made out the case of delay in refund for any period attributable to the assessee disentitling for interest. So much so, the officer has no escape from granting interest to the assessee in terms of s. 244A(1)(a). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DTR (Ker) 256 : (2010) 323 ITR 584 (Ker), wherein we have held that the interest is payable only from the date of introduction of the provision, that is, 1st June, 2003. 2. The next question raised is with regard to the date with reference to which the assessee is entitled to interest under s. 244A of the IT Act on the refund paid to it. The AO declined interest because the refund is attributable to an additional claim of deduction of provision for bad debt which was allowed by the first appellate authority. However, in appeal, the first appellate authority held that assessee is entitled to interest under s. 244A from 10th Jan., 2001 and not from 1st April, 1999 as claimed by the assessee in terms of s. 244A(1)(a) of the Act. The reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted at the rate of one-half per cent for every month or part of a month comprised in the period from the 1st day of April of the assessment year to the date on which the refund is granted:- Provided no interest shall be payable if the amount of refund is less than ten per cent of the tax determined under sub-s. (1) of s. 115WE or sub-s. (1) of s. 143 or on regular assessment. (b) in any other case, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period or periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted. (2) If the proceedings resulting in the refund are delayed for reasons attribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of payments of tax in any of the forms other than those referred to in sub-cl. (a) interest is provided in cl. (b) of s. 244A from the dates of payment of such tax or penalty till the date of grant of refund. This case is obviously covered by cl. (a) and so much so assessee is entitled to interest on excess refund from the beginning of the assessment year till the date of grant of refund which is granted by the Tribunal. However, the question is whether operation of sub-s. (2) justifies denial of interest for any period thereof as claimed by the Revenue. 6. Sub-s. (2) of s. 244A provides that assessee shall not be entitled to interest for the period of delay in issuing the proceedings leading to the refund that is attributable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e did not make any claim for deduction of provision for bad debt in the original return filed. However, before completion of the assessment the assessee made a claim of deduction of provision for bad debt on 10th Jan., 2001, which was rejected by the AO for failure to establish the claim by the assessee. The CIT(A) in the appeal filed against the assessment, allowed the claim and remanded the matter to the AO. Refund is granted to the assessee while issuing the revised order based on order in appeal filed by the assessee. The question to be considered is whether belated claim for deduction which when allowed entitled the assessee for refund is a situation covered by sub-s. (2) of s. 244A of the Act. The situation covered by sub-s. (2) is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold the order of the Tribunal declaring assessee's eligibility to get interest from 1 st April, 1999 till date of refund. 8. We notice a lacuna in the statute in the above provision because the situation that arose in this case is not contemplated therein. The Department could contend that if all claims of deduction were made in the original return and higher amount of refund was claimed in such return, the officer could have granted refund under s. 143(1) of the Act itself thereby avoiding interest on refund in regular assessment for longer period. Return was in fact processed under s. 143(1) and based on claims in the original return, refund was granted in terms of the claim made by the assessee. However, higher amount of refund and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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